No surprise here: EADS reported a loss for 2009 on write-offs for the A400M and the A380. Here are some links to tide readers over while we juggle listening to the earnings call with the JP Morgan Conference we are also listening to this morning.
EADS presentation, a 44 page PDF.
Links to the Earnings and Analyst Calls.
Financial Times reporting.
Market Watch reporting.
EADS won’t bid on KC-X tanker, or seek new partner.
A380 will have losses for 2-3 more years.
From the Earnings Call:
- EADS CEO Louis Gallois indicated that customer financing at Airbus in 2009 was the previously forecast 1bn Euros. Free cash flow at EADS, despite the A400M and A380 drags, is forecast in 2010 to be break-even prior to the customer financing and a negative 1bn Euros after the customer financing.
- EADS is still looking for further Lean production solutions for cost-cutting.
- Preserving liquidity is key 2010 goal.
- EADS can now turn attention to growth again.
- US tanker decision does not diminish our commitment to the US.
- (On A380 rates.) Gallois declined to forecast rates in 2011/12, but only that it will be greater than the 20 deliveries forecast in 2010. No forecast on break-even.
- Time schedule buffers have been used up on the A350. However, still sticking to present schedule of EIS in July 2013.
- Expects only a break-even in Airbus in 2010.
- R&D in 2010 will be a small increase.
- A320 production rate to increase in December 2010 from 34 to 36/mo. There are over-bookings in 2011.
- A400M cash outflows from 2010-14 is a “significant” number, but no detail provided.
- Power8 Plus savings won’t see effect until 2012.
- A320RE R&D cost not frozen yet because decisions not made. Cost will be incremental.
- EADS is optimistic about the export potential of the A400M, including in the USA.
- (A350-900 Gate 6 milestone was due in December or January-was it achieved?) (A380 loss-making contracts.) MG6 will be achieved in for the first quarter 2010. It was scheduled for December. For the time-being, it does not change the EIS. On loss-making contracts, if the contracts improve because of the dollar-Euro relationship, there is still the learning curve that is resulting in a loss.
- Price increases won’t be seen until 2011-12 and current pricing is not deteriorating.
- The American market is the biggest in the world on defense and we still want to compete in this market. We will continue to pursue it.
- Increase in A320 production rates will be in Europe, not China.